Submitted by Mike Krieger of KAM LLP
This really bothers me. You have to love that Warren Buffett, the richest man in the world, has deemed himself representative and ambassador for those making $250,000 and more..."People like myself" he says. People that take home $250,000 a year before taxes are somehow in the same category as the richest man in the world? I would say there is a fairly large gap between a $250,000 annual income and a $45 billion empire. And how did the powers that be arrive at this arbitrary yet significant figure of $250,000 as the line for dividing rich and poor? Warren, why not donate your money to the government that you feel so strongly should be funded with more money from the "rich" that you have appointed yourself representative of? I am beyond disgusted by these righteous "do as I say, not as I do folks that have already made a fortune and yet are lobbying for higher taxes as though they are elected representatives for the government's definition of "rich", meanwhile by and large their wealth has already been made and tax policy is immaterial to their incremental future wealth. If he feels so strongly about what people like him should be paying, WHAT'S STOPPING HIM? Pay more then, Warren, if it means so much to you. Nobody is stopping you and the government will gladly accept a larger check from you on April 15th. Meanwhile stop meddling in the business of people that are eons and light years away from you in wealth and are still working daily to achieve their own financial success and stability. And I'm not against paying more in taxes...I'm just against higher taxes as long as it's being funneled to the reckless careless idiots in Washington DC currently in charge of spending it...but that's subject for another conversation altogether.
- Written by a friend of mine last November
A Wolf in Sheep's Clothing
Anyone that has read these pieces for a while knows where I stand on Warren Buffett. Namely I can’t stand him. It has nothing to do with the fact that he has so much money. I am not an envious person and moreover I think having wealth anywhere near his is more of a curse than a blessing. The reason I can’t stand him is because he is a fraud. While he may have been a great investor at one point, he is more of a great actor than anything else. Here is one of the richest people in the world. He sits there in Nebraska, chuckling, drinking his cherry coke and eating hamburgers in this pathetically obvious attempt to convince the masses he is “just like us.” The term wolf in sheep’s was invented for guys like this. Like most people out there I don’t like bad guys. The trick; however, is that the most dangerous bad guys don’t come out and tell you they are bad guys and how they are going to fleece you. What they do is pretend they are the good guys. Pretend that they are on the side of the little guy or working for the “collective good,” which is a preposterous statement because there is no such thing. Human desires and notions of what is a good life are as varied as the stars in the sky. Once we start allowing officials or rich people to define “collective good” you can be sure we are finished.
I am currently rereading Henry David Thoreau’s Walden. Thoreau has been described as “an American author, poet, abolitionist, naturalist, tax resister, development critic, surveyor, historian, philosopher, and leading transcendentalist.” In other words, in my mind a true American hero. I was struck by this line as I was reading it the other day:
If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I should run for my life, as from that dry and parching wind of African deserts called the simoom, which fills the mouth and nose and ears and eyes with dust till you are suffocated, for fear that I should get some of his good done to me – some of its virus mingled with my blood. No – in this case I would rather suffer evil the natural way. A man is not a good man to me because he will feed me if I should be starving, or warm me if I should be freezing, or pull me out of a ditch if I should ever fall into one. I can find you a Newfoundland dog that will do as much.
Thank you sir.
So back to Buffett. The truth of the matter is, as I and other have exposed these last several years, is that he essentially runs a financial services company. When the system itself was threatened the status quo was threatened. Buffett stepped in and became a government agent once he saw the writing on the wall. He did not step up for America. He did not step up for the people. He stepped up for himself and his legacy. He stepped up to save the status quo because he is the status quo. All of this raises a very serious issue in America right now and one that needs to be dealt with in the next crisis (which has arrived) or we will never be able to recover into the world’s most vibrant and dynamic economy again. A lot of people lament the lack of upward mobility in the U.S. right now and I share those sentiments. However, equally important is downward mobility. What makes the concept of America unique is not merely the concept that the poor can become rich but that the rich can become poor. It is this second part that is the most dangerous to social cohesion when it disappears. Unfortunately, the system that we have today of an unholy alliance between Wall Street, Washington D.C. and the multi-national corporations (including the military industrial complex of course) stands there holding onto all the levers of power to serve as gatekeepers of their own empires.
I read a great article on a related topic recently. It was called “Central Planning and The Fall of the US Empire.” http://globalguerrillas.typepad.com/globalguerrillas/2011/07/journal-central-planning-and-the-fall-of-the-us-empire.html One of the most significant conclusions in my opinion was the following:
The answer is that an extreme concentration of wealth at the center of our market economy has led to a form of central planning. The concentration of wealth is now in so few hands and is so extreme in degree, that the combined liquid financial power of all of those not in this small group is inconsequential to determining the direction of the economy. As a result, we now have the equivalent of centralized planning in global marketplaces. A few thousand extremely wealthy people making decisions on the allocation of our collective wealth. The result was inevitable: gross misallocation across all facets of the private economy.
To see what this extreme wealth concentration looks like as a distribution, we don't have to look further than income distribution in the US (classic power law). The liquid wealth of those on the extreme left of the curve completely outweighs the 99.5% of the population to the right (the distribution is FAR more skewed than most people even imagine -- Republican or Democrat). This graph would also be a good way to demonstrate how decision making in a bureaucratic dictatorship in a country like the Soviet Union looked like before it collapsed.
Once again this brings us back to good old Uncle Warren. Have you noticed that Obama can’t make a speech these days without saying “Warren Buffett say this…or Warren Buffett says that.” I mean give me a freaking break. It seems that Buffett has been named head of the U.S. economy and basically Obama just picks up the phone and whatever uncle Warren says goes, despite the fact that the guy has a huge stake in one thing and one thing only. Preserving the status quo and preserving his legacy.
The Wolf Invests in Bank of America
The interesting thing about today is that I had intended to write this piece on Warren Buffett all week. It was just really fortuitous timing that this Bank of America news came out today. Gosh where to start. First of all, this $5 billion preferred investment by Uncle Warren in preferred stock is extremely bearish for the market, the economy and the financial system. This is not an investment, it is political-economic strategy. It tell us so many things that we probably already suspected. It tells us that Bank of America did indeed need capital. Even worse they probably need so much that they went to Uncle Warren for five big ones so that people would just look the other way and gain “confidence.” This is how out to lunch these guys are. They don’t understand that the root of the lack of confidence is that the people see a country devolving into a Banana Republic led by greedy oligarchs and politicians stealing everything in sight as the ship sinks. So then they roll out the number one crony capitalist in America, tell us he is investing in Bank of America and expect that to lead to confidence!! What a bunch of maniacs run this nation. This is 1789 France folks as I have said many times before.
Second, the fact that TPTB are resorting to Uncle Warren for everything now may mean the Fed is out of the game. No one has confidence in the Fed to come save the day so they need the next thing. That next thing is Uncle Warren. Unfortunately it’s not working and it is not going to work. You can see it in the market today. People are waking up. They are starting to see through the matrix. Buffett is a fraud and a shill. If you follow him it will be right over a cliff.
The Baby Boomer generation is getting old and their ideas about how political systems and economies operate are getting even older. My generation is coming into its own and we will determine our own destinies. You can step aside gracefully or you can be pushed aside. Either way your days of running the lives of this planet are numbered. The Fourth Turning is here.
Peace and wisdom,
"A Wolf In Sheep's Clothing" | ZeroHedge